ChainPrint — blockchain technology as “air traffic control” system for the publishing sector

With blockchain technology on the way to an open, sector-wide process automatization platform

Blockchain technology will enable socio-economic interactions and business models that, up to now, have been unthinkable. It is a new chance to radically disrupt existing services and systems using an innovative technology while at the same time making them more secure. This time, the book publishing industry shouldn’t sit on the fence and hesitate but rather take on an active role and, in a concerted effort, take part in this swiftly evolving transformation process. ChainPrint shows how the decentralized blockchain technology can help achieve a level of security and efficiency in production and distribution chains that will future-proof the economic viability of printed content.

Open process automatization platform powered by blockchain technology

In March 2014, flight MH 370, a passenger aircraft with 239 people on board, vanished from the radar, leaving the whole world puzzled and asking: what on earth happened to this Malaysia Airlines plane? Up to this day, no one knows.

The whole occurrence was so spectacular because, with the help of technology, planes have been closely monitored on their routes across the sky for decades now. What happened to flight MH 370 was a tragic and extreme exception. International cooperation and forward-looking processes are to thank for the fact that there are so few air traffic incidents. Air traffic control is a role model for many industry sectors when it comes to controlling operational procedures, people, machines and goods and time them in such a way as to avoid risk.

Let’s take a look at the publishing sector. What’s the situation like in this traditional industry? How transparent are processes in publishing houses, e.g., manuscript preparation, print orders or delivery. How often do resources and goods disappear off a publisher’s radar for a longer period of time or even completely? How many productions fail? Or, to take the metaphor further, how many MH 370 cases are there per month?

Lack of transparency causes high cost and leads to unproductive working. In our sector, the amount of information units and goods that need to be controlled increases exponentially with advances in digital technology and innovative production and supply chains, e.g., in the context of print-on-demand. To give an example, one offset print order with a print run of 10,000 equal copies can turn into 10,000 different individual items printed digitally, i.e. 10,000 individual orders that are directly delivered to retailers from the printers. No one can manually control this amount of goods, including the corresponding workflows and supply chains. Only a sophisticated data technology covering the whole industry is capable of doing that.

ChainPrint was launched at the Frankfurt Book Fair 2017. This innovative solution is the first publishing industry platform that is based on blockchain technology. ChainPrint organizes and supports the automated production and logistics of printed content for publishing houses and print buyers. How did the idea for “ChainPrint: The first useful publishing blockchain, made in Germany” originate? And what is blockchain?

In 2012, Calvendo was launched in Munich as a subsidiary of the educational publisher Cornelsen. It is the globally first fully automated wall calendar publishing platform. In mid-2016, Calvendo was sold to mediaprint Gruppe, a well-established German print and publishing house.

Calvendo enables photographers to not only create wall calendars, poster books, jigsaw puzzles, canvas prints and other textiles, using their own photos or other visual art and writing, but also to retail them internationally. The work of thousands of corporate and private Calvendo authors has created one of the most diverse curated offers of creative work worldwide with currently more than 300,000 available products.

Calvendo is a long tail business model that has proven its economic viability and almost completely does away with warehousing. The company turns the creative ideas of its content creators into digital bits that are then transformed through maximum efficiency into saleable products, i.e. the wall calendars (or other products) are stored in databases, produced on order, using digital print-on-demand technology, and then shipped just-in-time from their production site to retailers. Calvendo works with a network of international partners, including innovative printing houses as well as logistics and distribution partners.

Hans-Joachim Jauch, who co-authored this article, is the company’s founding CEO and Calvendo system architect. After numerous years working in management positions at traditional publishing houses (e.g., Süddeutscher Verlag, Oldenbourg Verlag) as well as IT companies, he resolved to establish a lean and decentralized content utilization platform that is highly automated and connected. Today, Calvendo has made a name for itself as a pioneer when it comes to interfacing digital and print processes as well as Industry 4.0.

ChainPrint — the first useful publishing blockchain

ChainPrint is based on the process experiences that have been made on the Calvendo platform, optimizing and scaling the process automatization developed by the company over the past five years. It is essentially all about workflow transparency and trust in data and people. The concept is based on the vision to optimize physical products in a market where content is increasingly fragmented and digitalized in such as way that it is ultimately still financially viable for as many right owners, publishers, suppliers, service providers and retailers as possible to produce and sell print media such as books and magazines.

Quick and efficient or customized and flexible — in book production, this has so far been an “either or” situation. Modern hard and software overcomes such contradictions. What is known as Industry 4.0 means that the production of the smallest possible production building blocks is being dovetailed with information and communication technology.

Following the principles of Industry 4.0, ChainPrint is based on efficiently networked IT systems, with a blockchain (Hyperledger Fabric) running behind it. A blockchain is a distributed database, or digital register, that logs individual process steps in a transparent and secure way (more details below). It provides affiliated process participants, such as publishers, printers and retailers, with transparent order status information and allows for the tracking and tracing of individual items.

ChainPrint is not a stand-alone or centralized production system (Manufacturing Execution System) or a printer but enables multi-tiered, decentralized media production and logistics. The different process participants such as printers continue to provide their services to their clients, using their own IT systems and machines. They do, however, report planned and completed process steps as transactions via standardized interfaces to the standardized ChainPrint. In an ideal scenario, such reports are directly generated by connected machines.

ChainPrint then takes over the “air traffic control” part, e.g., performing verification functions. For instance, the system checks for each individual order or printed copy if the various production and logistics providers that are part of the process chain all perform the agreed steps and stick to their delivery times. If not, automatic warnings are triggered and, for example, sent to book retailers. Printed copies can also “reroute“ themselves should any problems occur in the process chain, e.g., the breakdown of a printing press at printer A would automatically place the print order with printer B. Or in other words, print pdfs have a pilot on board that can decide on the best route in real time and depending on the situation, using a checklist, i.e. a previously established contingency plan. The blockchain maps this through so-called smart contracts.

ChainPrint is not an order generating platform for mediaprint Gruppe nor a platform for offers and price negotiation. All this continues to remain a bilateral relationship between buyers, e.g. publishers, and service providers. Every buyer and service provider is free to connect proprietary IT systems with ChainPrint in order to generate added value for themselves and the market, similar to apps running on a smartphone: without the operating system, e.g. iOS, they would be isolated programs. Entire ecosystems can only be created through the standardized OS interface. A cockpit that manages individual orders and visualizes their respective status would be an obvious app in this context. Whoever is responsible for production could use it to keep control of their orders that are distributed around the production network in real time — just like a radar.

ChainPrint is an open service that will be made available to the book publishing industry, using intelligent interfaces, called “blockchain oracles”, that identify and verify real-world occurrences and pass on this information to be used by smart contracts.

ChainPrint is currently used by Calvendo as its launch customer in a development and testing environment. mediaprint Gruppe has initiated the project and defines itself as an enabler of the decentralized network. As of spring 2018, the “air traffic control” system is to be opened for use to all publishers, print buyers, printers, logistics companies, distribution services and retailers. Anyone interested is very welcome to get in touch with the authors of this article at any time in order to get further information or gain practical experience with ChainPrint.

The ChainPrint team is currently also in talks with various companies, discussing the development of a sector-wide ChainPrint development alliance because for ChainPrint to fully realize its potential, it needs to be a jointly supported project.

What is blockchain technology?

ChainPrint as a highly automated and decentralized concept wouldn’t be viable without blockchain technology. Conventional databases would be unable to cope and/or be not secure enough. Together with AI, VR and AR, blockchain is currently regarded as a highly innovative basic and cross-sectional technology. Blockchains are based on distributed networks of servers that all work with timestamps and encryption and control each other, thus preventing manipulation. Data is turned into facts. The currently most well-known blockchain use case is the cryptocurrency Bitcoin that proves that assets can be transactioned without an intermediary, i.e. banks, while being recorded in a distributed ledger, i.e. a blockchain.

Conclusion

Using blockchain technology, ChainPrint, as a system already in use at Calvendo, has the potential to be a sector-wide production line for the publishing industry that improves quality, increases output and provides a more professional approach. The aim is to swiftly introduce innovative, industrial production methods that secure the future of the publishing industry.

ChainPrint needs to be implemented through a sector-wide alliance and is a joint task that we’d like to invite you to participate in. After all, our industry still generates the major part of its turnover with printed products. Print is not dead — and ChainPrint as its “air traffic control” system can support its safe onward journey.

The authors:

Hans-Joachim Jauchis an experienced industry professional with a management track record in B2B and consumer publishing (e.g., Thieme, Motor Presse, Süddeutscher Verlag, Oldenbourg Verlagsgruppe) as well as IT companies. Founder and CEO of Calvendo since 2012. He studied publishing and economics in Stuttgart and is an expert for telecommunications, digital business models and automated workflows in the media industry. As the ChainPrint project manager, he focuses on the practical applications of blockchain technology.

Klaus Peter StegenWith a background in bookselling, Klaus held various management roles at, amongst others, Otto Schmidt, Bertelsmann, Haufe Lexware, Medien Union, Oetinger and Klopotek. He is a partner in a number of media consultancy companies (Narses, Newbooks Solutions, Klopotek) and together with Rüdiger Wischenbart, organizes the yearly Publishers Forum in Berlin. He is also a business angel, investor and senior advisor for Hashplay, a venture capital firm in California.